Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No. 15468

IMPLEMENTATION COMPLETION REPORT

ETHIOPIA

FOURTH LIVESTOCK DEVELOPMENT PROJECT(CREDIT 1782-ET)

MARCH 26, 1996

Agriculture and Environment Operations DivisionEastern Africa DepartmentAfrica Region

This document has a restricted distribution and may be used by recipients only in the performance oftheir official duties. Its contents may not otherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

At Appraisal: Birr 2.07 = US$ 1.00At Completion: Birr 6.22 US$ 1.00

WEIGHTS AND MEASURES

(Metric)

FISCAL YEAR

Borrower = July 8 - July 7IDA = July 1 - June 30

ABBREVIATIONS AND ACRONYMS

AFRDMD Animal and Fisheries Resources Development Main DepartmentAHRC Animal Health Research Centre (Formerly CDIL - Central Disease Investigation

Laboratory)AIDB Agricultural and Industrial Development BankAISCO Agricultural Input Supply CorporationCDIL Central Disease Investigation Laboratory (changed to AHRC during project

implementationDPM Deputy Project ManagerERR Economic Rate of ReturnFLDP Fourth Livestock Development ProjectFMD Foot and Mouth DiseaseFSDU Forage System Development UnitGOE Government of EthiopiaIAR Institute of Agricultural ResearchIDA International Development AssociationILCA International Livestock Centre for AfricaMOA Ministry of AgricultureNAIC National Artificial Insemination CentreNVI National Veterinary InstitutePARC Pan African Rinderpest CampaignPC Project CoordinatorPCU Project Coordination UnitPM Project ManagerSC Service CooperativeSORDU Southern Rangelands Development UnitTA Technical AssistanceVEEU Veterinary Epidemiology and Economics Unit

FOR OFFICIAL USE ONLY

IMPLEMENTATION COMPLETION REPORTETHIOPIA

FOURTH LIVESTOCK DEVELOPMENT PROJECT(CR. 1782-ET)

Contents

Preface . ................................................. iiEvaluation Summary .......................................... iii

PART I: PROJECT IMPLEMENTATION ASSESSMENT .................. IA. Statement/Evaluation of objectives ........................... 1B. Achievements of Project Objectives .......................... 2C. Implementation Records And Major Factors Affecting the Project ... ..... 3D. Project Sustainability ................................... 7E. Bank Performance ..................................... 8F. Borrower Performance .................................. 8G. Assessment of Outcome ..................... 9H. Future Operations ................... 9I. Lessons Learned ................... 9

Part II STATISTICAL TABLES

APPENDICES

A. Aide-memoire

B. MAP

This document has a restricted distribution and may be used by recipients only in the performance of their officialduties. Its contents may not otherwise be disclosed without World Bank authorization.

IMPLEMENTATION COMPLETION REPORT

ETHIOPIA

FOURTH LIVESTOCK DEVELOPMENT PROJECT(Cr. 1782-ET!

Preface

This is the Implementation Completion Report (ICR) for the Fourth LivestockDevelopment Project in Ethiopia, for which Credit 1782-ET in the amount of SDR 32.3 million(US$ 45.2 million equivalent) was approved on April 28, 1987 and made effective on January29, 1988.

The Credit was closed on December 31, 1994 (compared with the original closingdate of December 31, 1992). The final disbursement took place on March 24, 1995.Cofinancing for the project was provided by IFAD.

The ICR was prepared by staff of the FAO/World Bank Cooperative Program (CP)on behalf of AF2AE Division of the Africa Region and reviewed by Ms. S. Ganguly, DivisionChief, AF2AE and Gautam Sengupta, Acting Projects Advisor, AF2 and staff in AF2AE. TheICR is based on information obtained from the project files and on the findings of an ICRmission" which visited Ethiopia in September 1995. Due to additional internal reviews andanalyses, findings of this report may differ from those in the Completion Report submitted byFAO/CP. The Borrower contributed to the preparation of the ICR by providing input to theAide Memoire drafted by the FAO/CP completion mission. The Borrower's ICR is located inthe Africa Regional Information Center, since there is no summary. No completion report waswritten by IFAD and no comments were received from them on this completion report.

Pietros Kidane (Mission Leader, Economist), Gerold Bodeker (Financial Analyst) and Nicholas Buck(Livestock Specialist).

IMPLEMENTATION COMPLETION REPORT

ETHIOPIAFOURTH LIVESTOCK DEVELOPMENT PROJECT

(CR 1782-ET)

Evaluation Summary

Introduction

Between 1973 and 1987, IDA provided 12 credits totalling US$238 million to Ethiopia, whichincluded irrigation and rainfed agriculture, coffee development, livestock, agricultural research, marketingand storage, credit and drought rehabilitation and resettlement programs.

The Fourth Livestock Development Project (FLDP) was the first five-year phase of a long-termdevelopment program to increase livestock and agricultural production by improving animal health andnutrition. The six main components were (i) animal health development, including field services withina prescribed project area and animal health support, (ii) animal nutrition development through improvedforage production, intensive small-scale fattening and adaptive research, (iii) pilot range managementactivities among semi-nomadic pastoralists in the southern rangelands, (iv) agricultural credit forsmallholder livestock development, including for fattening and veterinarian needs, (v) institutionaldevelopment of MOA through training and technical assistance and (vi) completion of a livestock exporttrade development study. Unlike the three previous World Bank assisted livestock projects, whichfocused on dairying, marketing, abattoir facilities and rangeland management, the FLDP concentrated onsupport to smallholders through improving health services and developing animal feed. Focusing onsmallholder agriculture after the devastating famine of 1984/85 was indeed appropriate, as well as thetesting of some innovations on the Southern Rangelands Development Unit (SORDU) initiated under theThird Livestock Development project, related to introducing low cost pastoral participation for projectsustainabil ity.

In spite of the difficult social and political conditions, including the civil strife, the ERR is stillattractive at 20 percent, but somewhat lower than the 26 percent that had been estimated at appraisal.The outcome of the mid-term review which took place in late 1990 indicate the project was well focusedand responsive to the needs of the livestock sector. Overall, some 1.4 million farmers have adoptedforage production using tree and herbaceous legumes and grasses,which is well-beyond appraisalexpectations.

Implementation Experience and Results

Project start-up in 1987 was enhanced by the excellent support provided by the ProjectPreparation Facility (PPF). A small Project Coordination Unit (PCU) was established within AFRDMD(Animal and Fisheries Resources Development Main Department), which ensured that the project wasimplemented by line MOA department staff and were held accountable. However, as implementationprogressed, overall delays were experienced due to a change in economic policy in 1990, change ofGovernment in 1991 and decentralization of many responsibilities to the regions in 1992, all of whichwere beyond the project's control. Due to these circumstances, frequent changes in senior managementdisrupted project implementation. Delays in implementing the animal health component were also

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experienced due to difficulties in procuring veterinary drugs, laboratory and vaccine productionequipment. The two-year extension of the closing date to December 1994 permitted the completion ofseveral components.

The project generally achieved its objectives, although with varying degrees betweencomponents. Forage development, within the Animal Nutrition Component, successfully introduced someexotic herbaceous and tree legumes in the country. A large number of extension manuals on growingand feeding forages was produced under the project, which made a significant impact on extensionworkers and farmers. After the initial importation of seeds, the project undertook adaptive forage trialsand demonstration plots as envisaged at appraisal. As a result of this process, farmers have begun toappreciate the beneficial effects of the legumes on improving soil fertility and crop rotation and wereenabled to use modern livestock farming through production of high quality forage.

The animal health component established a diagnostic and epidemiological expertise for majorinfectious diseases through the Animal Health Research Center (AHRC) (formerly the Central DiseaseInvestigation Laboratory) and the Veterinary Epidemiology and Economics Unit (VEEU), and vaccineproduction at the National Veterinary Institute (NVI). Although the new AHRC facilities have not yetbecome fully operational, the Center has established reliable modern diagnostic technology for rinderpest,peste des petits ruminants and foot and mouth disease (FMD) and other important diseases. However,after thorough deliberation, the proposed FMD and rabies vaccine production facilities were notestablished, as they would not have been economically viable due to the small demand.

The veterinary field service activities suffered from civil war disruptions and the change inpolicies by the new Government. It did not fully realize the project's objectives of improving the deliveryof drugs, vaccines and basic equipment in the rural areas. The project has made a major impact on theMOA's technical and scientific knowledge through staff training and technical assistance related toveterinary diagnosis, epidemiology and forage development. The livestock export trade study providedthe Government with livestock export strategies pertinent to the post-transitional phase of the Ethiopianeconomy. With regard to SORDU, the project achieved only part of its objectives. Although 27 ServiceCooperatives (SCs) were planned to cover all the rangelands, only five were established, due to lack ofstaff resources. Through veterinary clinics, shops and other activities, the existing SCs provide importantservices to pastoralists and are useful mechanisms to channel extension advice. Four SCs employveterinary scouts, one is assisting pastoralists and one SC is in charge of a 17,000 ha ranch. However,this is the only one out of the three envisaged ranches that was transferred to the management of a SC.

The project successfully contributed to strengthening MOA by acquiring technical know-howthrough in-service training. About 110 people received overseas degree programs and short-termtraining, while 4,000 junior technical staff and 5,000 farmers received local training, many of whom nowmanage newly established units such as VEEU, AHRC and the Forage Development Teams or used inother capacities. A deliberate decision was taken at the outset that project management would be theresponsibility of existing departments and agencies rather than creating a new management unit. Theproject was implemented by line MOA staff, which ensured sustainability and avoided many of theproblems experienced by similar projects in the past.

Under the Agriculture Credit, Part D of the project, medium-term loans were made throughAIDB (Agricultural and Industrial Development Bank) to SCs for onlending to producer cooperatives andfarmers. This part of the project was implemented by IFAD through a cooperative agreement with IDA.About 90 percent of the loans were used to purchase draft oxen, with the smaller portion lent for beefcattle fattening. The amount used for animal fattening was small due to the failure of cooperatives toproduce molasses-urea blocks, as obtaining liquid molasses was difficult.

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Findings, Future Operations and Key Lessons Learned

The overall outcome of the project is rated satisfactory. After the regionalization process whichbegan in 1992, responsibility for the Animal Health and Animal Nutrition components was transferredto Regions 3 (consisting of East and West Gojam, North and South Gonder and North and South Wello)and 4 (East, West and North Shewa, East and West Harerghe, Ilubabor, Welega, and SEPAR), exceptVEEU and AHRC, which remain with the MOA. These two institutions are to be managed in asustainable manner by the MOA which is committed to allocating sufficient resources. The veterinaryfield services activity that aimed to reach rural areas through the service cooperative shops, is notsustainable, as SCs were disbanded in most cases after the communist regime collapsed. Following theliberalization of the economy, the private sector is gradually filling in this gap by providing veterinarydrugs wherever there is sufficient demand. The forage development activities are sustainable, as thefarmers enthusiastically are adopting them and the regions are willing to provide the necessary resourcesto support the forage development programs. The regional governments also intend to gradually transferthe growing and distribution of the forage seeds to the private sector.

Major lessons that emerged from the implementation of FLDP are:

(a) Transfer of appropriate technology to local professionals and easy replicability ofprograms, such as the forage development and disease investigation components, areimportant ingredients for sustainability. Conversely, total dependence on public importsfor inputs could prove unsustainable as demonstrated by the limited availability ofveterinary drugs.

(b) Well-conceived and focused TA is bound to make a lasting impact on the subjectprograms, as demonstrated in the cases of forage development and integratedVEEU/AHRC components.

(c) To ensure an efficient sustainable animal health service, the private sector should haveresponsibility for importing and distributing veterinary drugs and medicines, and clinicalfield services should be privatized.

(d) Production of forage seed and the development of forage technology at the farm level iscrucial to the development of smallholders' livestock farming.

(e) Continuity of senior staff in program formulation and implementation is highly associatedwith successful results.

(f) Considerable time and resources can be saved if dubious components, such as the FMDand rabies vaccine production, are excluded from the outset. Similarly, selection ofimplementing agencies with limited experience and technical capabilities should beresisted in order to avoid disappointing performances, such as that of the TechnicalServices Department in the MOA, which was responsible for implementing AHRC.

(g) Project design should include specific provision for all the activities that are necessaryfor the successful implementation of components, i.e., taking for granted that molasses-urea blocks would be produced hindered the animal fattening component.

IMPLEMENTATION COMPLETION REPORT

ETHIOPIA

FOURTH LIVESTOCK DEVELOPMENT PROJECT(CR 1782-ET)

PART I: PROJECT IMPLEMENTATION ASSESSMENT

A. STATEMENT/EVALUATION OF OBJECTIVES

1. The Fourth Livestock Development Project (FLDP) was envisaged at appraisal as the firstfive-year phase of a long-term development program for the livestock sector, thereby forming an integralpart of the government's development strategy for livestock and small-holder agriculture. The overallobjectives were to increase livestock and agricultural production by improving animal health andnutrition, increasing the efficiency of resource utilization at the farm level and strengthening supportservices at the government level.

2. The project consists of six main components: (i) animal health development, including fieldservices within a prescribed project area and animal health support including (a) expanded laboratoryservices, (b) vaccine production and epidemiology analysis; (ii) animal nutrition development throughimproved forage production, intensive small-scale fattening and adaptive research; (iii) pilot rangemanagement activities among semi-nomadic pastoralists in the southern rangelands; (iv) agricultural creditto support smallholder livestock development, including for fattening and veterinarian needs; (v)institutional development of MOA. through training and technical assistance; and (vi) completion of alivestock export trade development study.

3. The Vice-Minister of MOA, Animal and Fisheries Resources Development MainDepartment (AFRDMD), was the ex-officio Project Manager (PM). He was assisted by two DeputyProject Managers (DPMs) -- the head of the Veterinary Service Department and the head of the AnimalProduction Department -- with responsibility respectively for the implementation of the animal health andanimal nutrition components. A Project Coordination Unit (PCU) was established, and two coordinatorswere to be appointed to assist the DPMs. Subsequently, however, only one Project Coordinator (PC)was appointed. The rangelands pilot component was implemented by the Southern RangelandsDevelopment Unit (SORDU), a semi-autonomous unit operating under the overall responsibility of theVice Minister of AFRDMD. The Agricultural Input Supply Corporation (AISCO) was designated toimport all veterinary drugs and vaccines, while the Agricultural and Industrial Development Bank (AIDB)was to implement the credit component. The Institute of Agricultural Research (IAR) and InternationalLivestock Center for Africa (ILCA) became cooperating institutions in forage systems development.ILCA was also responsible for implementing SORDU's research/survey activities.

4. Unlike the past three World Bank assisted livestock projects, which concentrated ondairying, marketing, abattoir facilities and on rangeland management, the FLDP correctly focused onsupporting smallholders by improving health services and developing animal feed. This approach wassound, because most of the livestock in the country are found in the smallholder dominated highlands,and livestock improvement means improving agricultural production and the well-being of smallholders.Focusing on smallholder agriculture after the devastating famine of 1984/85 was indeed appropriate.Testing some innovations on SORDU was also relevant, as this program was a relatively successful

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undertaking within the range development activities contained in the Third Livestock DevelopmentProject.

B. ACHIEVEMENT OF PROJECT OBJECTIVES

5. The project has generally achieved its objectives, although the level of attainment differsbetween components. The most immediately apparent achievement is in forage development under theAniimal Nutrition Component, where the project successfully introduced some exotic herbaceous andtree legumes in the country. After the initial importation of seeds, the project undertook adaptive trialsof these seeds and subsequently prepared demonstration plots, as envisaged at appraisal. By the end ofthe implementation period, some 160 tons of different kind of forage seeds were produced anddistributed. About 10 million seedlings of tree legumes were raised and distributed to farmers forbackyard planting and to various institutions. The project also planted some 18,600 km of forage understrip and alley planting systems; about 17,500 ha of undersowing with cereal crops; 11,000 ha of over-sowing of grazing land and 9,000 ha of degraded areas as a conservation measure. Overall, some 1.4million farmers have adopted forage production using tree and herbaceous legumes and grasses, whichis well-beyond appraisal expectations. About 2,500 farmers have been engaged to produce seeds offorage legumes and grasses under the project. In this process, farmers have come to appreciate thebeneficial effects of the legumes on soil fertility and some farmers have commenced to rotate seedproduction with other food crops. The production of high quality forage has enabled farmers to embarkon modern livestock farming. Abolition of the centrally planned economy has created a suitable conditionfor producers to be involved in profitable businesses by feeding animals high quality forage to producemilk or meat. An improved cow distribution program in Region 4 " (not foreseen at appraisal) is nowbenefitting from the project introduced forages.

6. Achievements within the Animal Health Component included the establishment ofdiagnostic and epidemiological capability for major infectious diseases through two institutions developedunder the project -- the Aninial Health Research Center (AHRC) (formerly the Central DiseaseInvestigation Laboratory) and the Veterinary Epidemiology and Economics Unit (VEEU) -- and thestrengthening of vaccine production at the National Veterinary Institute (NVI). Although the new AHRCfacilities have yet to become fully operational (para 13), the Center has succeeded in establishing reliablemodern diagnostic technology for rinderpest, peste des petits ruminants and foot and mouth disease(FMD). The work on FMD has provided the basis for selecting virus strains needed for FMD vaccinesin Ethiopia, and that on rinderpest has contributed to the national and continental surveillance andepidemiological studies within the framework of the Pan African Rinderpest Campaign (PARC). AHRC'sfindings have demonstrated the seriousness of pest des petits ruminants in Ethiopia, previouslyunrecognized. The VEEU has undertaken, for the first time in the country, a systematic study of herdhealth and productivity in nine former regions of the country, thus providing information which can beused in quantifying and evaluating the impact of diseases on production.

I' The original areas of Shewa, Gojam, Welega, Ilubabor, Kefa and Hararge included in the project were subsequentlyrezoned and designated as Regions 3, 4, 14 and the South Ethiopia People Administrative Region (SEPAR). Thepartitioning of the geographical areas as of July 1994 consist of Region 3 - East and West Gojam, North and SouthGonder and North and South Wello;, Region 4 - East, West and North Shewa, East and West Harerghe, Llubabor,Welega, SEPAR (includes Kiffa area); and Region 14 - Addis Ababa.

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7. After exhaustive deliberations, the project did not establish the proposed FMD and rabiesvaccine production facilities because it was concluded this would not to be economically viable due tothe small domestic demand. Instead, it strengthened NVI by (a) rehabilitating and expanding the plant'scapacity to produce its existing range of liquid and freeze dried vaccines to combat major livestockdiseases, (b) enabling the Institute to up-grade its manufacturing practice to international standards and(c) doubling its production potential of vaccines for major livestock diseases such as rinderpest.contagious bovine pleuropneumonia, sheep and goat pox, Newcastle disease, African horse sickness,blackleg, anthrax, bovine and ovine pasteurellosis.

8. The veterinary field service, in particular, was disrupted by the civil war and the changein policies implemented by the new Government. The component did not fully realize the project'sobjective of improving the delivery of drugs, vaccines and basic equipment in the rural areas. Althoughthe project, in its initial stages, expended considerable effort in training community-based representativesin preparation for their operating Service Cooperative (SC) drug stores and providing basic services, thiswas not followed up by establishing a sustainable system of drug supply. In fact, most of the SCs weredisbanded because of the change in policies after the war ended. The revolving fund to be maintainedby the Agricultural Input Supply Corporation (AISCO), proposed at appraisal to support this process, wasalso not established. The support provided by the project to the National Artificial Insemination Center(NAIC) to the Veterinary Faculty and to the Tsetse and Trypanosomiasis Control Unit (which was notforeseen at appraisal) was useful in improving the operations and performance of these institutions.

9. Institutionally the project has made a major impact by improving the technical and scientificbase of MOA through staff training and technical assistance. The developments in veterinary diagnosis,epidemiology and economics and strengthening of the forage development team merit emphasis as majorachievements in developing the livestock unit of the MOA. Completion of the livestock export tradestudy is also to be considered as an attained objective in that it has provided the Government withpertinent livestock export strategies in the context of the post-transitional phase of the Ethiopian economy.With regard to SORDU, the project achieved only part of its objectives, notably in the establishment offive SCs. Other goals, such as continued pastoral investigation activities and transfer of all three ranchesto the SCs, have not been accomplished.

10. The project still yields an attractive Economic Rate of Return (ERR), in spite of the difficultand changing social and political conditions which characterized its implementation. The ERR is,however, relatively lower than what had been estimated at appraisal, mainly because of the lowperformance of the field veterinary services due to the lack of an efficient drug supply system and themajor interruption of project activities in 1991 caused by the civil war. The overall ERR calculated forthe project is 20 percent compared to the appraisal estimate of 26 percent. There are also somedifferences in the ERR estimates at completion and appraisal estimates regarding the components. Atappraisal these estimates were: 32 percent for animal health, 15 percent for animal nutrition and 30percent for fattening as opposed to current estimates of 28 percent, 44 percent and 35 percent,respectively.

C. IMPLEMENTATION RECORD AND MAJOR FACTORS AFFECTING THE PROJECT

General

11. As a result of a well planned Project Preparation Facility (PPF), project implementationstarted promptly. Prior to project effectiveness, the PCU was already established, some vehicles wereprocured and in-service training was conducted, terms of reference for consultants were drafted and work

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programs were outlined. As implementation progressed, however, some of the components, particularlyanimal health service delivery, experienced difficulties and delays, mailly due to problems inprocurement and civil works. The civil war seriously disrupted implemienltation of the project during1990 and 1991. Changes in the Government's socio-economic policy in 1990 from a centrally plannedto a mixed economy and the overthrow of the Government in May 1991 also contributed toimplementationi delays. With the introduction of regionalization in 1992. responsibility for most of theproject components shifted to the regions, and this disrupted earlier lines of conmnunications, budgetprocesses and administration. The extension of the credit closing date by two years to December 31,1994allowed the project to regain the lost ground.

12. A mid-term review was undertaken for the project in late 1990. wlhere it was concludedthat the project was well focused and responsive to the needs of the livestock sector. Hence, no significantchanges were proposed, but it was recommended that a follow-up project be prepared to consolidateFLDP accomplishments. This was done in 1992, with the assistance of FAO, but the Government ofEthiopia (GOE) has not yet pursued the follow-up project to make it an investment reality.

Animal Health

13. The timely procurement of veterinary drugs proved difficult and lagged behind the progressmade in strengthening the veterinary field services to which considerable assistance was directed in theform of staff training and improved mobility. The main reason for the delay was due to impracticalGovernment and veterinary service requirements for testing drugs and slow bureaucratic proceduresbetween the veterinary service and AISCO's procedures. The bulk of the drugs under the project were,therefore, not imported until the latter years of the project. About 64 percent of the funds for drugpurchase were expended in 1992, thus hindering the regular supply of veterinary drugs to the shops ofthe SCs. Further, a sustainable supply was not achieved, as the revolving fund envisaged at appraisalwas not established. The delays in the procurement of veterinary drugs during the earlier part of theproject may also have been caused by the government's decision to use funds from other donors for thispurpose, which were not always forthcoming. In the later stages of the project, after the change ofGovernment, most of the SCs voluntarily disbanded. This meant that the method of field supply anddistribution of drugs envisaged at the outset largely collapsed. The new policies relied heavily on theprivate sector to take over the procurement and supply of drugs and on the privatization of the veterinaryservice to fill the role of the defunct SCs. Although the new policies are clearly superior in the longterm, a partial vacuum was inevitable during the transition period. The establishment of the AHRC wasalso a major concern because of the delay in construction of the buildings. Albeit the constructioncontract was awarded as early as August 1989, the laboratory facilities and associated buildings are stillincomplete and not fully commissioned. Up to 1991, the lack of construction material contributed to thedelay. The quality of the laboratory facilities is poor, with design flaws, such as narrow doors whichhad to be torn down to allow access of large equipment. The AHRC represented the only major civilwork under the project, and will still require additional investments before it can become fully functional.The primary cause of the difficulties experienced in the construction of the AHRC was the poorperformance of the contractor and supervisors. Supervision missions brought the problems to theGovernment's attention, but were not adequately addressed. Fortunately, the TA personnel and thetrained staff had already commnenced their work on disease diagnosis and surveillance at the oldlaboratories in Shola and Debre Zeit and had covered considerable ground before they moved to the newpremises. Success in FMD diagnosis, rinderpest surveillance and disease investigation mentioned earlierhave their roots in these old laboratories.

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14. The economic feasibility of the proposed establishment of the FMD and Rabies vaccineproduction units was extensively discussed with MOA, NVI veterinarians and IDA supervision missions.IDA pointed out that the limited FMD vaccine requirement by Ethiopia and the complexity of productiontechniques could not economically justify a dedicated production unit, and advised that the supply beimported to meet the country's needs. The borrower, however, was of the view that acquiring theproduction technology domestically was an important step toward enhancing the country's self-reliancein this area. The issue was settled in 1992 when it was agreed to forego the FMD and Rabies facilitiesand instead to devote the funds to import FMD vaccine and to strengthen the NVI. The wisdom of thisdecision became clear later, when GOE resolved that NVI was to become an autonomous institution andto operate on a commercial basis. In the end, the importation of FMD vaccine was not done, butexpanding the production capacity of NVI's existing vaccine supply was successfully achieved. Withinthe animal health component the project also provided support in terms of equipment and training thatimproved the efficiency of the Veterinary faculty within the NVI, the National Artificial InseminationCenter and the Tsetse and Trypanosomiasis Control Unit.

Animal Nutrition

15. Within the animal nutrition component, forage development was well planned. Seeds forforage and tree legumes as well as for grasses were imported early and field trials were carried outpromptly by the Forage System Development Unit (FSDU) of the project. Subsequently, the ForageTeams organized field demonstrations which secured good responses from farmers. A large number ofextension manuals on growing and feeding forages was produced by the project, and this has made a greatimpact on extension workers and farmers. The Forage Teams also organized farmers to produce seedson contract, which were procured and distributed by the project in small amounts, free of charge by fieldagents, in order to accelerate the introduction of the new technology. Seven forage introductory strategieswere developed for cultivated lands, range and pasture areas and for the farmers' backyard (AppendixB of FAO/CP Completion Report of November 1, 1995). During the last year of the project, some 160tons of seeds were produced and stored in the two stores established by the project, before they werecleaned and distributed.

16. The small-scale fattening program did not evolve as expected under the project, becausethe supplemental feeding of crop by-products using molasses and urea did not materialize. At appraisalit was assumed that cooperatives would produce molasses-urea blocks, but securing the supply of liquidmolasses to the SCs proved difficult. However, the project introduced another program based on farmer-produced forage, following the traditional fattening model of the Hararge area. Thousands of animalshave been successfully conditioned/fattened under the project with the assistance of the Forage Teams.

Southern Rangelands Pilot Development

17. Under the Project, SORDU was re-organized into five development sections in line withproject activities: (a) Cooperative Development, (b) Animal Health and Production, (c) Marketing andFattening, (d) Range Management and (e) Infrastructure. The Cooperative Development section wascentral to the project, as SCs were expected to become the basis for providing essential services topastoralists. Initial plans called for 27 SCs aimed at increasing and strengthening extension efforts withpastoralist groups for low cost participation in all the rangelands. However, only five were establishedby the project mainly due to lack of resources, particularly with respect to staff, who were already fullystretched even to provide assistance to the five SCs. By operating shops, veterinary clinics and otheractivities, the SCs are providing important services to pastoralists, and in turn, have become usefulvehicles through which the project could channel its extension advice. Four SCs are employing veterinary

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scouts, one is assisting pastoralists and one SC is managing a 17,000 ha ranch recently transferred to itfrom the project. Only one of the three envisaged ranches was transferred to the management of a SC.

18. The project has trained 12 veterinary scouts, and 20 pastoralists were trained as primaryanimal health agents. A disease investigation laboratory was also established, but is not yet operationalfor lack of appropriate staff. With regard to range management, project activities were limited to bushcontrol techniques by burning and clearing. Data collection on these and other environmentalmanagement, as well as on extension efforts, was initiated through the establishment of a Monitoring andEvaluation Unit. Unfortunately, this was not continued when the Technical Assistance (TA) personnelleft. The data collected is also not used for evaluating the project's impact. SORDU's infrastructureactivities included maintaining and repairing roads, wells and small surface ponds. However, given thelimited capacity of the maintenance equipment, many ponds have silted-up and their water retentioncapacity reduced. Water availability being the top priority in the area, pastoralists are frustrated by lackof equipment for desilting their ponds, even against payment.

Livestock Production Credit

19. Under Part D of the project for livestock credit, medium-term loans were made throughAIDB to SCs for onlending to producer cooperatives and farmers. This part of the project wasimplemented by IFAD through a cooperative agreement with IDA. About 90 percent of the credit wasextended for purchasing draft oxen through AIDB, instead of animal fattening, due to the low demandfrom producers for fattening animals (para 16). Following the change in economic policy, many SCswho lent to individual farmers are not functioning; hence the repayment records are disappointingly lowat about 35 percent. The project also assisted AIDB through staff training in dairy poultry, developmentbanking and the provision of vehicles.

Institutional Development

20. One of the distinct features of FLDP was its efforts and success in acquiring technicalknow-how through training which contributed to the strengthening of the MOA. Approximately 110people attended overseas degree programs and short-term training. The project also provided localtraining for about 4,000 junior technical staff and 5,000 farmers. These trained staff are now operatingand managing the newly established units such as the VEEU, AHRC and the Forage Development Teams.Many are contributing to the work of the national PARC (Pan Africa Rinderpest Campaign) project orserving in the regions. The 300 person-months of TA contributed significantly to strengthening MOAby providing in-service and on the job training. MOA's mobility within the project area was significantlyimproved by FLDP through the provision of a substantial number of vehicles (Table 5), enablingcoverage of the project area without difficulty. The extension effort of FLDP was remarkable,particularly in forage development. Parallel to the field extension work (establishing foragedemonstration plots, organizing seed multiplication and discussions with farmers), the project produceda large number of extension manuals and materials which have raised MOA's capability to communicatewith farmers. Diagnostic and epidemiology manuals have also proved very useful.

Livestock Export Trade Development Study

21. This study was completed on time in 1990. It aimed to assess Ethiopia's potential toexpand the export of livestock and related products. Its main recommendations were to export liveanimals to the Middle East and processed meat, such as corned beef and other cooked meat, to Europe.

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The findings and recommendations of the study are considered still valid and of importance to the futuredevelopment of the livestock industry.

Project Organization and Management

22. As institution building was an important project objective, a deliberate decision was takenat the outset that project management would be the responsibility of existing departments and agenciesrather than creating a new management unit. The Credit Agreement specified that the project would beimplemented under the overall supervision of the Vice Minister responsible for the Animal and FisheriesResources development Main Department (AFRDMD) within MOA. The heads of the veterinary andanimal productions departments would have direct responsibility for carrying out the veterinary andanimal production related activities respectively. In essence this meant that the Vice Minister was theProject Manager, and the two department heads were Deputy Project Managers. A small ProjectCoordination Unit (PCU) was established within AFRDMD to assist the Project Manager and his deputiesto execute the project. This innovative management structure ensured that the project was implementedby line MOA department staff and ensured sustainability because only line staff were responsible. Itfacilitated one of the main objectives which was to strengthen AFRDMD veterinary and animalproduction support services. The small PCU. consisting of the coordinator. a seconded specialist fromeach of the two departments. a training specialist and an accountant, were directly responsible to the twodeputy project managers.

23. This method of management worked well and avoided many of the problems generallyencountered with the implementation of similar projects in the past. It avoided the problem associatedwith an enclave unit, and thereby facilitated the strengthening of the veterinary and animal productionsupport services, as well as MOA's and AISCO's procurement, monitoring, recording and accountingservices. The fact that the project continued to operate throughout the civil war, albeit not withoutserious disruption, as well as being able to adjust to the free market policies adopted after the civil war,is a clear indication that the project management structure was appropriate and worked well.

24. Nevertheless, frequent changes in senior management disrupted project implementation.During the course of the project there were three changes of Vice Ministers, six changes of the DeputyProject Manager for Animal Health Services, and four different Deputy Project Managers in charge ofAnimal Production. While some of these changes were inevitable in view of the change of Governmentafter the civil war, the frequency of replacement in senior management is a clear indication ofunrestrained political interference during the implementation period. This inevitably resulted indiscontinuity and disruption of project activities, as well as delays in tackling procurement and otherproblems.

Project Costs and Financing

25. As indicated in Table 8A, estimated total project costs are US$40.2 million, which is 70percent of the US$57.2 million estimated at appraisal. IDA disbursed US$32.5 million (SDR 23.6million) out of US$39.0 estimated, which is 83 percent of the total credit. IFAD disbursed US$6.4million, which is about 83% of its total commitment at appraisal of US$7.7 million. About US$13.6million (SDR 8.7 million) of the IDA credit remains undisbursed. Project costs are lower than plannedat appraisal due to (a) the exclusion of FMD and rabies production units, (b) operating costs were mainlyborne by the Government and (c) as a result of the very challenging political circumstances during theproject implementation period.

8

D. PROJECT SUSTAINABILITY

26. After regionalization of the project which commenced in 1992, responsibility for the twocore components of the FLDP, Animal Health and Animal Nutrition, were transferred to Regions 3 and4. Two exceptions are VEEU and AHRC. which remain with MOA. The sustainability of the latter twounits is practically assured, as the MOA is committed to making them work by providing adequate staffand operating funds. MOA is also studying ways of establishing workable linkages between these twounits and the veterinary services in the regions. Within the Animal Health component. field servicesconcerned with the provision of drugs and clinical services through the SCs is unsustainable, althoughsome SCs in remote areas may persist to channel some drugs where accessibility is difficult. Fortunately,however, and more appropriately, the private sector is emerging gradually to provide these services.

27. The achievements made in forage development and improved animal nutrition are indeedsustainable due to the enthusiastic adoption by producers and the liberalization of the economy. Inaddition, the regional governments vow to support the forage programs by allocating the necessaryresources. They are also planning to charge for the forage seeds and gradually to eliminate any subsidyand transfer the entire seed production and distribution business to the private sector.

28. The sustainability of MOA's improved national level institutional capability can beconsidered uncertain, because the core project trained staff have been relocated to the regions, and it isnot clear that the latter will be able to provide the necessary environment and resources for the staff toperform adequately.

29. Most of SORDU's activities in providing technical advice could be sustainable if the Regionensures the provision of a budget at least at current levels. But the maintenance of the infrastructure,particularly the ponds, may be unsustainable because the capability of SORDU in keeping the machineryoperational appears limited, and maintaining/repairing the infrastructure free of cost to the user isexpensive and unrealistic. There are indications, however, that pastoralists have confidence in the projectand may be willing to pay for these services.

E. BANK PERFORMANCE

30. The project was well prepared and the project design, albeit somewhat ambitious, haslargely "stood the test of time" as indicated by the sustainability of the two main components, AnimalHealth and Animal Nutrition. As already indicated, the management structure was innovative andeffective in strengthening important core services and transferring technology know how to MOA. Somecriticism of the inclusion of FMD and Rabies vaccine production is warranted, as more analysis wouldhave indicated that it was virtually impossible to upgrade the existing facility to facilitate this vaccineoutput, and a large-scale production plant could not be economically justified. At appraisal the level oftechnical sophistication required to produce viral vaccines of the FMD type was seriously underestimated.The small-scale fattening program did not evolve as expected because the supplemental feeding on cropby-products using molasses and urea did not materialize. The appraisal mission should also have beenmore conscious of the difficulties that Cooperatives would experience in the procurement and distributionof liquid molasses to produce molasses-urea blocks under Ethiopian conditions. However, no provisionwas made under the project for the supply of material or for the manufacture of the block. Despite theseshortcomings, which were rectified during implementation, the overall project design was sound andeffective.

9

31. The Bank mounted 11 supervision missions. The first five, including one before projecteffectiveness, consisted of only a livestock specialist, while the remaining six were multi-disciplinary withan optimum mix of relevant specializations. Due to the civil war, no supervision was carried out in 1991.Overall, the supervision missions were supportive and focused on the real issues affecting theimplementation of the project. The missions were aware of the political and social difficulties underwhich the project was operating, hence were sympathetic to the project management and staff.Nevertheless, this situation did not prevent them from taking firm positions, even counter to projectmanagement's position, if this was found to be important from the country's development perspective.A good example is the stance taken against the establishment of an uneconomical FMD vaccineproduction unit. Supervision missions were unable to correct the frequent changes in project managementpersonnel. The main supervision shortcoming was probably the infrequent visits to SORDU during theimplementation period.

F. BORROWER PERFORMANCE

32. Considering the difficult political and social situation that prevailed during the greater partof the implementation period, GOE's performance can be considered moderately satisfactory. In spiteof GOE's general doubts relating to the ambitious provision of large overseas training, vehicles andtechnical assistance, it has had a liberal policy with FLDP, which indicates its commitment to the project.However, GOE should have endeavored to improve project management and its performance. The slowprogress of the civil works and the poor quality of the buildings of the AHRC should have promptedGOE to resolve the problems. Project management's laxity in ensuring that MOA's ConstructionDepartment, in charge of all aspects of the project's civil works, gave high priority to the works was amajor shortcoming. With the exception of poor collection of subloans by AIDB and some delays insubmitting Audit Reports, GOE was generally in compliance with project covenants. MOA's frequentchange of the DPMs for Animal Health, and to a lesser extent the DPM for Animal Nutrition, wasdetrimental to the project.

33. One of the main problems throughout the project was MOA's inability to utilize projectfunds allocated for operating costs. Out of a total of SDR 4.0 million (US$ 5.7 million equivalent)allocated for this purpose, only SDR 1.8 million (US$ 2.5 million Equivalent) or 44 percent was utilized.These funds were intended to cover a portion of incremental operating and maintenance costs for vehicles,equipment and buildings as well as staff allowances and per diems. Although supervision missions drewMOA's attention to the negative impact on project implementation and IDA eventually increased thedisbursement rate to 100 percent for this category, the problem was still largely unsolved by the closingdate. Cumbersome and inflexible financial procedures were at the root of the problem. The net resultwas that the Government utilized a considerable amount of its own funds for operating expenses whichcould have been disbursed under the credit if only submitted to IDA against the project.

G. ASSESSMENT OF OUTCOME

34. The overall outcome of the project is considered satisfactory. The result would have beenhighly satisfactory if it were not for the disappointing achievements in strengthening the field veterinaryservices and sustainable drug distribution. Fortunately, however, other animal health activities have beensuccessful as the project has provided improved national veterinary diagnostic and investigatory services,a national veterinary epidemiology capability and enhanced vaccine production. The project alsosucceeded in introducing forage production technology in the project area, thereby enhancing the feedingof working and milking animals. This has become the basis for developing modern dairy farms usinghealthier cows and/or conditioning and fattening animals for the local markets. The forage development

10

technologies have completely changed the outlook of farmers. They are appreciating the advantages ofusing a smaller number of improved and well-fed animals, and the usefulness of growing forage cropsby rotating or in association with food crops. The demonstrated forage production technology, togetherwith the advent of economic liberalization and peace, had a positive effect on the traditional livestockfarmers. Environmentally, the project has improved large areas of degraded land, using forages, and hassuccessfully undertaken shrub control trials in the southern rangelands. Furthermore, FLDP hasdemonstrated the validity of organizing pastoralists into cooperatives in order to help themselves and asa medium for the provision of project services. It has also contributed significantly to the economy byimproving milk and meat production (Appendix C of FAO's Completion Report) and in enhancing controlof rinderpest.

H. FUTURE OPERATIONS

35. As mentioned in para 26, most of the project activities are now under the responsibility ofRegions 3 and 4 and are being managed by them. GOE's approach with regard to animal health is toencourage the private sector to provide veterinary drug supplies and clinical services. This process hascommenced in the main urban centers and is expected to expand in smaller centers too, as demand forsuch services increases. In the future, the public sector intends to concentrate on regulating animal healthaspects and controlling the major epizootic diseases; hence, major resources will be directed towards theseservices. The VEEU and AHRC will operate under MOA, within its normal ministerial budget, butadditional input from some reputable institutions would be required in order to support the nationalexpertise developed under the project in order to continue their professional advancement.

36. All regions assert their commitment to the forage production and vow to support thisscheme by allocating adequate resources. The regions propose to introduce a system under which farmerspay for seeds and to involve the private sector (para 27).

I. LESSONS LEARNED

37. Major lessons drawn from FLDP's implementation experience are the following:

(a) Transfer of appropriate technology to local professionals and easy replicabilityof programs, such as the forage development and disease investigationcomponents, are important ingredients for sustainability. Conversely, totaldependence on public imports for inputs could prove unsustainable asdemonstrated by the limited availability of veterinary drugs.

(b) Well-conceived and focused TA is bound to make a lasting impact on the subjectprograms, as demonstrated in the cases of forage development and integratedVEEU/AHRC components.

(c) To ensure an efficient sustainable animal health service, the private sector shouldhave responsibility for importing and distributing veterinary drugs and medicines,and clinical field services should be privatized.

(d) Production of forage seed and the development of forage technology at the farmlevel is crucial to the development of smallholders' livestock farming.

11

(e) Continuity of senior staff in program formulation and implementation is highlyassociated with successful results.

(f) Considerable time and resources can be saved if dubious components. such as theFMD and rabies vaccine production, are excluded from the outset. Similarly.selection of implementing agencies with limited experience and technicalcapabilities should be resisted in order to avoid disappointing performance, suchas that of the Technical Services Department in the MOA, which was responsiblefor implementing AHRC.

(g) Project design should include specific provisions for all the activities that arenecessary for the successful implementation of components. i.e. taking forgranted that molasses-urea blocks would be produced hindered the animilalfattening component.

12

Table 1: Summary of Assessmeiits

A. Achievement of obiectives Substantial Partial Negligible Not Applicablet/) () ) (V)

Macro policies [E] LI]

Sector policies Li Oi LiFinancial objectives i Li Li Institutional development [El Li Li LI]Physical objectives Li Ei E iPoverty reduction Ei Li LiGender issues E Li L iOther social objectives Li i Li Environmental objectives i O L L

Public sector management Li ELi LPrivate sector development L Li Li

Other (specify) Li Li Li LiB. Project sustainability Likely Unlikely Uncertain

(V) (/) )

F L LiHi ahly

C. Bank performance satisfactory Satisfactory Deficient(V) (V) (V)

Identification Li [ L

Preparation assistance Li Li Appraisal i L iSupervision Li 1 E

13

HighlyD. Borrower performance satisfactory Satisfactory Deficient

(M) ) (M)Preparation T] [

Implementation ZI LIZ

Covenant compliance LIZ L Operation (if applicable) L] 7] LII

Hi,ghlV HighlvE. Assessment of outcome satisfactory Satisfactory Unsatisfactory unsatisfactory

(M) (V) M))Ol Fm LZ

Table 2: Related Bank Loans/Credits

Preeedinrg operations

I. Addis Ababa Dairy Development Milk production 1971 Completed

2. Second Livestock Development Marketing & processing 1973 Completedof livestock and products

3. Agricultural Minimum Package Increase crop production by 1973 Completedsupplying modern inputs

4. Drought Areas Rehabilitation Rehabilitation 1974 Completed

5. Rangeland Development (Third Livestock Rangeland development 1975 CompletedCredit)

6. Second Agricultural Minimum Package Increase crop production by 1980 Completedsupplying modern inputs

7. Drought Recovery Program Rehabilitation 1985 Completed

Followjing operations

1. First Peasant Agric. Development Increase food production in the 1988 Completedhighlands

1. National Fertilizer Sector Devel. Increased crop production 1995 On-goingthrough fertilizer supply

2. National Seed Systems Development Increased crop production 1995 On-goingthrough seed production andSupply

.. ........ ,.

14

Table 3: Project Timetable

1;;; | ;1 ;;,$ ^;4; l ............ ........ :Identifhcation/Preparatton 1983/84 a! 1983/84'

Preappraisal Mission November 1984 July 15, 1985l

Appraisal Mission January 1986 March 1986l

Negotiations October 6, 1986 December 15, 1986l

Board prcsentation April 21. 1987 April 28. 1987l

Signling June 29. 1987 June 29. 1987l

Effective ness September 29. 1987 January 29. 1988

Mi.ter... review October/Nov. 1990 October/Nov. 1990 l

Project completion September 1995 September 1995

Credit closing December 31, 1992 December 31, 1994

Prepared by consultants under the Third Livestock Development Project (Cr. 603-El) and financed underP'PF 355-ET.

Table 4: Credit Disbursements: Cumulative Estimated and Actual(US$ millions)

lFY88 lFY89 lFY90 lFY91 |FY92 lFY93 FY94 F Y95 [

Appraisal estitmate 7.6 17.3 268 32.9 37.2 39.0 - -

Actual 3.5 6.5 10.1 15.6 20.1 24.1 30.7 32.5

Actual as % of estimate 42.7 34.4 33.3 40.6 45.2 51.6 65.7 69.6

Undisbursed balance 13.3 1D

Date of final disbursement March 24, 1995

''As of February 5, 1996.

15

Table 5: Key Indicators for Project Implementation

1. PERFORMANCE INDICATORS

A. ANIMAL HEALTH

Veterinary Field Services

SC Animal Health Centres No. 90 211

Traininig FAHRs No. 900 135

Vaccinations 1992-95 No. not specitied 696.528

Trypaniosomiasis treatments No. 42.605

Internal parasites treatments No. 164.645

Training farmers in animal health No. 4235

V EEU

Establish VEEU Institution I

Traini epidemiologists No. 3 5

Animal Health National Elements

AHRC Laboratory construction (formerly CDIL) complex I

Rabies vaccine plant No. I 0

FMD vacciie plant No. ()

Statt housing at Bedelle No. 6 3

Artificial Inseminiationi Centre equipmenlt Not toieseeni at Deliveredappraisal

B.ANIMAL NUTRITION PROGRAM

Forage Seed Production

Seed stores No. 62

Forage seed production toils 63 160(1994/95)

Multi-purpose tree seedlings No. not specified 10 million

Contract seed producers No. not specitied 2. 500

Forage Systems Development

Forage strips km n 18.629

Backyard torage No. of trees 89.999No. of sites 1,050

Under-sowinig ha . 17.478

Stock exclusion ha 930

Over-sowing of grazing land ha 11.097

Aerial Seeding Operation- medium seeding rate ha ha 5.000- very low seeding rate ha ha 4,000

Roadside sowiIng ha 1.850

Participating SCs No. 332

Small-Scale Fattening

By-product fattening scheme No. of 12.500 3.890tarmers

Forage fattenlilng scheme (cattle) No. of not foreseen at 7,964animals appraisal

Forage fattening scheme (sheep/goats) No. of not toreseen at 458animals appraisal

16

Table 5: Key Indicators for Project lmplementation

Extension Material Preparation

F;orage De velopmnent Manual copie5 lot specitiedl 2000)(

|Fatteninig Manual 983

| otage Dev. Extensi.oi Manual 2'-.(000

Forage Fattening Extenisionl Manual ,,5.30()

|C. SORDU

|Establishmentl of Service Cooperatives No. 27 5

|Tranisfer ol ranches to SCs No. 3

|Iraitning of Veterinary Scouts No. not specitied 12

|Traitlijoc of Pastoralist PAHC No. '()

|Ranlge nlon tot ing sites 17

|Manual bush clearing demonstration ha 75

Bush control by hurniing ha 14.()()(

II[. CIVIL WORKS BUILDINGS (Animal Health)

|Purchasing, Processing & Distribution Vet. Drugs

|Central Investigation~~~00 n Labraor

|Main Lah /Ottice ~~~~~~1250 m2 j jGarage0I()() m2 .I

| Farm A nima I Exp I U0 ~~~lOm2 tAnimal Laboratory 100 mr2 I i

Fencing mtetres 2()()0) n a

Housing

Tye A 105 m2 tl 11

oTygpe B 85Di 7 7

Type C 55i m2 7 7

CHa Shed 180 J t t

|Small workshop tOl m2 j

|National Veterinary Institute Nsnit

Rabies Vaccinie Laboratory No. I 0

[FMD Vacettle Production No. 0

Large Anital 1ousitig No. 01

|Tsetse & Trypanosomiasis Control Unit

Bedelle Laboralory 200 m02 1

CIVIL WORKS BUILDINGS (Forage Production)

SForage System Development Unit

Fienl Laboratory 70Lm2 I 0

Forage Seed Production Unit

GSeed Stor0age. Ofice 105 IT 6

Seed Dry tng 225 mr 6 ()

Statt Houses 5() m' 6 na

Covered Dry Racks o20 m2 6 na

SORDU

17

Table 5: Key Indicators for Project Implementation

1 , ','{ , a, ' .' ' " '"''"l'" ' '' '"''M '- ' ' ' '' 'g' "''W',''"' "''S"''" ' '' 'L' ' ' ' ' ' ........................ ,, .... ... ...., ....... ... ... .... .Laboratory lo m2 l l

Conference Hall 100 m- 0

III. VEHICLES

Sedan (2WD) No 5 4

Station Wagon (4WD) No 27 27

Customised Pickup (4WD) No 5 0

Pickup standard (4WD) No 21 0

Pickup standard (2WD) No 14 59

Compact (4WD) No 27 0

Vehicles (unspecified - drug procuremiient etc) No 5 0

Truck 3 ton No 1 2

Truck 7 ton 4WD No 4 6

Double Cabin Pick-up No 9 82

Bus 30 seater No 3 3

Motor cycle No 173 214

Bicycle No 443 n.a.

Hard Top Pick-up No 0 2

IV. TECHNICAL ASSISTANCE

Animal Health

I.Epidemiology and Economics Unit

Sr. Epidemiologist m/m 30 28

Sr. Computer Specialist 12 12.5

Statistician Computer Specialist 30 0

Epidemiology Consultant 8 6

Animal Health Economist 6 0

2.Animal Health Field Services

Pharmacy Study 2 5*3.Central Disease Investigation Laboratory

Senior Veterinary Disease Investigator 30 36

Laboratory Mngt. Advisor 20 8

4.HQ Veterinary Services

Lab and Workshop Design 2 2

5.Tsetse and Trypanosomiasis Control Unit

Other Consultants 10 n. a.

6.Project Coordination Unit

Sr.Livestock Development Advisor 6 60

Livestock Training Advisor 36 0

Microbiologist .. 3 0Other Consultants 10 0

* Bulk Drug Importation Study (2 m/m); Drug Marketing Study(3 mm).

18

Table 5: Key Indicators for Project Implementation

f--E-:-; ; j -E E :k .--:-E E -.. , .. :: --- E . ........... ..

Animal Nutritioni

I.Forage Systems Development ULnit

Forage Systemis Agronomist M/M 22 7

Biomiietriciani - Coitract 20 0

Forage Agronomist 22 36

2.MOA Seed Production Unit

Seed Production Consultanits 4 11

3.Small Scale Fattening Extensioni Service

Pioductioni Eco iom iist 7 1

Drainage Consultant 2 5 0

Other Consultants 5 4

Pasture Ecoinomist 2.5 0

SORDU

I.Sordu Cooperative Development Program

Socio-Ecolnoillist (COOPS) 14 31

Radio Equipment Consultant 2 0

Consultancies lor Carrying out Studies 10 0

2.Sordu Research, Training,M & E

Research Super-visor 20 5

M & E Consultaiti 15 19

Institution Building

1.MOA Planning & ProgrammingProcurement Specialist m/m 60 n.a.

Tech. Sup. Unit Advisor 12 n.a.

Evaluation Econiomist 24 24

2.MOA COOP. Prog. & Agr.Dev.Dept

Agric. Extension Methods m/m 3 12

3.MOA Finance Dept

Senior Financial Advisor m/m 12 0

Financial Officer 60 0

Sr. Computer Specialist 17 0

Computer Specialist 60 0

4.Survey and Trials Program

Research Advisor m/m 18 0

Soil Expert 6 0

19

Table 6: Key Indicators for Project Operations

1. Key operating Indicatorsin SAR/President's Estimated ActualReport

Not Applicable

Table 7: Studies Included in Project 1'

I.Veterinary drug To assess opportunities for Completed 1986 (PPF) Advised against bulkimportation study bulk drug importation and importations, made

repackaging reccomendations for more

efficient use

2. Live Animal and Meat To develop an economically Completed 1990 Directed GOE to privateExport Study competitive livestock sector entiy in livestock

and/meat export trade trade; impact stxill evolving

3. Veterinary Drug To design an efficient and Completed 1992 Of continuing influenice inMarketing Study competitive marketing the progressive iberlisation

strategy for veterinary drugs of the provision of alland medicines veterinaci services

4. Herd Health & To determine herd Completed 1994 Original research in EthiopiaProductivity Monitonng productivity and constraints which confimns the poorStnudy amenable to health and productivit b ol cattle in

production interventions Ethiopian environment.Given GOE commitmentshould have major impacr indirectiiig epiderlnt(ilogrcairesearch anid extension

In addition to the major studies, a series of working reports are-detailed in Appendix B. Addendum 1.

20

Table 8A: Project Costs

0 .0...... p- e.tha ( US$'O)Latest

ComponentLocal Foreign Totalcosts costs Total

1. Animal Health 10,200 13,200 23,400 27,107

2. Animal Nutrition 2,400 2,800 5,200 2,985

3. S.O.R.D.U. 2,100 2,600 4,700 1,776

4. Agriculture Credit 3,100 3,200 6,300 6,395

5. M.O.A. Institution 2,200 3,100 5,300 1,568Building

6. Livestock Export 0 500 500 409Trade

Sub-total: 20,000 25,400 45,400

Physical & Price 4,100 7,700 11,800Contingencies

Sub-total: i' 24,100 33. 100 57,200

minus taxes and duties ( 5,300) ______

~~~~~~~~~~~~~~~. .. . .. . . .. .. ... . ......... . .. . .... . : .. : . ... . . .... . .... .... 77

TotalCost000; L8000000008; 00 0$it:ii033~10 \0-)0 ;i0-ii057,2\00)ii 40,;0-24

-] Including taxes and duties.

bl Excluding taxes and duties.

Table 8B: Project Financing(US$'000)

j 0f ;0t t 0 00 :- 0tS ouri; Appra\ 2 :0t;t 0!l-020 tisale La)t |t: test

costs costs E otmatlEtmt

Governiment of Ethiopia 1 10,500 1,362

IDA 39,000 32,483

IFAD 7,700 6,395

TOTAL 57,200 40,240

n' Excluding taxes and duties.

21

Table 9: Economic Costs and Benefits

The Economic Rate of Return (ERR) calculated for the project at completion is 20 percent.Assumptions and basis for the analysis are provided in Appendix C of the FAO/CP ICR datedNovember 1, 1995. The newly assessed ERR is lower than what had been estimated at appraisalmainly because of the modest achievements in the field veterinary services. This is better illustratedby comparing the re-estimated ERRs of each component at completion with that of appraisal. Atappraisal estimates were: 32 percent for animal health, 15 percent for animal nutrition and 30 percentfor fattening; as opposed to current estimates of 28 percent, 44 percent and 35 percent, respectively.Furthermore, the interruption experienced during the civil war has disrupted the pattern of investmentand accrual of benefits.

22

Table 10. Status of Legal Covenants

Agr eaet Section Covenant, Statu Original Revised DsrpinCmet:TyptV it i e if .0 i Daptes i Dates Cofovenant

4.01 (b) 9 C 7/7/87 - Borrower to set up cost accounting Borrower set up costsystem to monitor cost-effectiveness accounting system whichof all types of vehicles, became ineffective due to

recent regionalization...............................................................................................................................................................................................................................

4.02 3 C 4th Qtr - Borrower to ensure AISCO have In compliancefis. yr. sufficient funds to meet local

expenditures for following fiscal year................................................................................................................................................................................................................................

4.04 2 NC - - AIDB to ensure timely repayment of Not complied with.stib-loans provided unider the project. Repayment is unsatisfactory.

...............................................................................................................................................................................................................................

5.01 (b) 1/9 CD each - Have accounts audited, incl. special In compliance, but with sometI & ii) fis. yr. accounts by independent auditors delays

acceptable to IDA and submit certifiedcopy to IDA.

5.01 (c) 1/9 C - Borrower to maintain separate In compliance(i & ii) records of expenditures and retain

for one year after completion of audit.................................................................. I............................................................................................................................................................

DCA I (c) 5/9/10 C 6/30/87 - Borrower to employ specialists and In complianceSch. 3 consultants listed in I (c) acceptable

to borrower and IDA...................................................................... I........................................................................................................................................................

11 (1) (a) 4/5/9 C - Each Zonal Veterinary Officer to In compliance (now done bysubmit work programme and budget Regional Officer)for following year for approval byMOA.

.................................................................................................................................................................................................................... ..........

11(1) (c) 2/9 C Mar. 31 - Borrower, with IDA, review In complianceeach year adequacy of drug and veterinary

equipment prices charged by AISCO........................................................................................................... .. . . .. .. . . .. .. . . .. .. . . .......................................................................... w__________,.................. _

II (1) (d) 5/9 C Feb. 28 - Borrower to furnish to IDA for In compliance (now providedeach year comment list of Woredas to be by Awraja List)

serviced the following year andfinal list by Mar. 31.

......................................................... I......................................I....... ............ .........................................................................................................

11(1) (0) 5/10 C - - Borrower to ensure positions listed In compliance (now filled byin Annex to Schedule 3 filled in by MOA and Regional Offices)MOA and by Zonal Offices.

Covenant Types Present StatusI Accounts/audit 7 Involuntary resettlement C = Covenant Complied with2 Financial Performance/operating revenue from Beneficiaries 8 Indigenous people CD = Complied with after delay3 Flow and Utilization fo project funds 9 Monitoring, review and reporting CP = Complied with partially4 Counterpart funds 10 Implementation NC = Not complied with5 Management aspects of project or executing agency 11 Sectoral or cross-sectoral budgetary/resource allocation6 Environmental covenants 12 Sectoral/cross-sectoral regulatory/instiEutional action

13 Other

23

Table 10. Status of Legal Covenants

A remen1...... . .~ aed . . n:; . - C

III (b) 5/10 C 7/7/87 - Borrower to transfer responsibilitv In compliancefor forage production and distributionto Animal & Fisheries Dept. of MOA

III (d) 5 C Borrower to ensure ratio of Dev. In compliance (althoughAgents to farm family is not less Coops have decreased inthan 1: 1,200 and that Dev. Agents number)are servicing Cooperatives.

111 (d) 2 C - - Famiers to be paid cash for seed In compliancesold to MOA and prices set annuallyin consultation with IDA.

............................................................................................................................................................................................................................

IV (b) 5/10 C 7/7/87 - Borrower to transfer responsibility In compliancefor livestock fattening creditprogramme to AIDB.

................................................................................................................................................................................................................ I.............

IV (c) 5/9 C Feb. 28 - SORDU to fumish to IDA for In complianceeach yr. comment draft annual work

programme for following year............ ....................................................................................................................................................................................................................

IV (d) 5/9 C June 30 - SORDU to fumish to IDA final In complianceeach yr. annual work programme for following

year including IDA comments.

IV (o) 13 CP 7/7/88 - SORDU to complete study on Not complied with. Onlytransfer of 3 ranches in pilot one ranch transferredproject area to pastoralistcooperatives.

......................................................................................................................................................................... I....................................................

IV (f) 13 NC 6/30/88 - Complete study on transfer of Agreements reached thatcattle transport trucks from this does not make senseSORDU to Cooperative Organisations. under present conditions

.....................................................................................I...............................................................................I...........................................................

VI 13 C 12/31/88 - Borrower to complete Livcstock In compliancetrade study and reviewrecommendations with IDA by3/31/89............................ I..........I..........................................................................................................................................................................................

Vill 5/9 C 12/31/88 - Prepare Mid Term Review and In compliancereview findings with IDA.

24

Table 11: Compliance with Operational Manual Statements

Statement Number and Title I Describe and Comment on Lack of Compliance

Not applicable

Table 12: Bank Resources: Staff Inputs

Planned Revised ActualStage of ... .... ........

Project Cycle Wee

|Preparation to 90.6 150.0|appraisal l__ _ _ _ _ _ _ _ _ _ _ _ _ _ _

|Appraisal ______55.0 101.6|

Negotiations through 15.4 29.1

| Board approval ___________

Supervision 177.0 388.7

|Implementation 11.0 46.2 14.0 48.9 13.5 45.3||Completion Report l______ ____ ____

| TAL- A 1.0 462 :49O 714.1. - .

25

Table 13: Bank Resources: Missions

Performance Rating

Number Spedali2ed Implemen- oevelop-Stage of Mo-nth/ of 4ank Days in Staff Skills - attion ment Types of

Prject ,Cye' Year Raft ,.,e. represented ' status h Objeetives Problems s£

Preparation 4/84 4 48 L,L,AHlF

Preappralsal 7-8/85 4 104 A,F,L,v

Appraisal 3/86 6 140 A. AE.AH. _

AN. E. F.SO

Negotiation Stage 4/87 2 16 A.L

Supervision 1 4-5/87 1 17 L HS HS

2 6/88 I 15 L S HS P, PM

,,3 , 11/88 1 7 L P

., 4 4/89 I 13 L HS S PM

5 1/90 7 L 5 HS S

6 6/90 3 45 AH.E,L,AN, S S P

7 10-11/90 4 68 AH,AN,E,L HS HS

8 1/92 3 21 AH,E.L S S W,P

9 9-10/92 4 38 A,E.EN.L S S W,P.PM

10 5-6/93 4 64 AH,EN,L,L, S S D.P.PM

11 2-3/94 5 110 AN.AH.E,EN, U U C.D.P,PM

Completion Report 9/95 3 48 E,F,L S S

A = Agriculturalist; AE = Agricultural Extension Specialist; AH = Animal Health Specialist; AN = Animal Nutrition Specialist;E = Economist; EN = Environment Specialist; F = Financial Analyst: L = Livestock Specialist; R = Rangeland ManagementSpecialist, SO = Sociologist/Anthropologist

b' HS = Highly Satisfactory: S = Satisfactory; U = Unsatisfactory.

PM = Project Management; P = Procurement; C = Compliance with Legal Covenants; W = War; D Disbursements

d Partial Supervision in the Western Zone. Form 590 was not completed.

Appendix A

Aide-m6moire

A. Introduction

1. A mission"from the FAO/World Bank Cooperative Programme visited Ethiopiafrom 4 to 21 September 1995 to prepare an Implementation Completion Report (ICR) for theFourth Livestock Development Project (FLDP). The mission worked mainly with theMinistry of Agriculture (MOA), particularly with the team of project staff assigned toprepare the ICR. In addition, meetings were held with the National Veterinary Institute(NVI), the National Animal Health Research Centre (AHRC), the National ArtificialInsemination Centre (NAIC), the Agricultural Input Supply Corporation (AISCO), theAgricultural and Industrial Development Bank (AIDB), the Institute of Agricultural Research(IAR) and the International Livestock Centre for Africa (ILCA). Field visits were undertakenin Regions 3, 4 and 14, and discussions were held with farmers and local authorities.

2. The mission would like to express its appreciation to the officials of the MOAfor organizing its work programme efficiently and for their continued support. This aidem,moire, which is subject to confirmation by IDA management, summarizes the mission'sobservations and findings.

B. Background

3. The FLDP was prepared under the Third Livestock Project (Cr.603-ET) in1984/85, and appraised in March 1986. This led to the approval of an IDA credit of SDR33.2 million on 28 April 1987. Subsequently an IFAD loan of SDR 4.5 million was alsoapproved to provide livestock production credit. Both the credit and loan, which were to bedisbursed over five years, accounted for about 82% of the total costs. The IFAD loan closedat the end of December 1992, as scheduled, while the IDA credit was closed on December31, 1994, following two years of extension.

4. The primary objective of the project was to enhance livestock and agriculturalproduction by improving animal heath and animal nutrition. The main project componentscomprised:

- animal health development including the strengthening of field services in adefined project area and expansion of national level laboratories, vaccineproduction and epidemiological services;

- animal nutrition development through improved forage production, intensivesmall-scale fattening and adaptive research;

- pilot range management and utilization by agro-pastoralists in the southernrangelands;

"Consisted of Messrs. Pietros Kidane (Mission Leader, Economist), Gerold Bodeker(Financial Analyst) and Nicholas Buck (Livestock Specialist).

ETHIOPIA: Fourth Livestock Development Project (Credit No. 1782-ET)Implementation Completion Report

Appendix A: Aide-memoire

- credit for peasant livestock development, including for fattening and veterinarianneeds;

- institutional support to MOA through training and technical assistance; and- a livestock export trade development study.

6. The project provided for a project management in which the Vice-Minister of theMOA Animal and Fisheries Resources Development Main Department(AFRDMD) becamethe ex-officio project manager. He was to be assisted by two deputy managers: the head ofthe Veterinary Service Department and that of the Animal Production Department, to beresponsible, respectively, for the implementation of the animal health and animal nutritioncomponents. A Project Coordination Unit (PCU) was to be established, and two coordinatorswere to be appointed to assist the two Deputy Project Managers within the PCU.Subsequently, only one project coordinator (PC) was appointed. The rangelands pilotcomponent was to be implemented by the Southern Rangelands Development Unit (SORDU),a semi-autonomous unit operating under the overall responsibility of the Vice Minister ofAFRDMD. AISCO was designated to import all veterinary drugs and vaccines, while AIDBwas to implement the credit component. IAR and ILCA were to become cooperatinginstitutions in forage systems development. The latter was also to implement SORDU'sresearch/survey activities.

C. Project Concept and Design

7. The idea of a fourth livestock project aimed at supporting peasants by improvinganimal health services and developing animal feed, was sound. This is because most of thelivestock in the country are found in the peasant dominated highland areas, and improvementof livestock means improving agricultural production and well being of peasants. Focusingon peasant agriculture after the disastrous famine of 1984/85 was indeed pertinent. The pastthree World Bank assisted projects had concentrated on dairying, meat marketing andabattoirs, and rangelands management. Likewise, the idea of following-up SORDU with apilot programme to test some innovations, was also appropriate, particularly after therealization that past range management efforts had not brought the desired results.

8. In spite of the conceptual soundness, however, some anomalies can be observed inthe project design, particularly concerning project organization and management, veterinarydrug procurement and distribution and the inclusion of foot and mouth (FMD) and rabiesvaccine production units, which were later excluded on account of their complexity. Whilethe proposition to implement the project within the existing MOA structure was appropriate,the designation of the Vice-Minister as the project manager was not, as he could not dedicatethe necessary time to manage the project being already fully occupied with other MOA tasks.The idea that the two deputies would have accomplished the tasks of a project manager wasalso not workable, since none of them would have the overall picture and responsibility forthe project, being each in charge for one component only. The same could be said with

2

ETlHIOPIA: Fourth Livestock Development Project (Credit No. 1782-ET)Implementauon Completion Report

Appendix A Aide-rmemoire

regard to the two Project Coordinators. This arrangement has not facilitated the definitionof clear responsibilities and authority for policy guidance and for the day to day managementof the project, and has led to the obfuscation of the line of command. An error of judgementwas also made when the distribution of veterinary drugs was assigned to AISCO as it hadneither the experience and capability nor the network to undertake this task.

C. Project Implementation and Results

General

9. The approval by IDA of a Project Preparation Facility (PPF) had enabled the projectto commence early. One year before the project was approved, the PCU was alreadyestablished, some in-service training was conducted, procurement of some vehicles completedand preparation of work programmes and terms of reference for TA personnel drafted. Thisprogress continued in the following years with regard to animal nutrition, but not with thatof animal health as it was saddled with serious problems in veterinary drug and equipmentprocurement and delay in civil works. Policy and government changes, civil unrest and thereorganisation of the administrative structures into autonomous regions have interfered withthe project's pace of implementation, and the extension of the project by two years washelpful. A brief account of project implementation is given below.

Animal Health

10. Veterinary Drug Procurement and Distribution. Procurement of veterinary drugsfell far behind schedule and was a major area of concern. Initially, the main reason for thedelay was impractical veterinary testings requirements, which proved cumbersome, timeconsuming and unacceptable to some manufacturers. This was exacerbated by lengthybureaucratic procedures between the veterinarians and AISCO. Due to this, a regular andsustained supply of drugs was not established. The major supplies arrived in two tranches in1991 and 1992, but by this time the effort expended in training Farmers' Animal HealthRepresentatives (FAHR) and in encouraging Service Cooperatives (SC) to retail drugs hadbeen dissipated. At the same time the change of policy reduced the emphasis of SCs as adrug outlet and the private sector was being encouraged to enter the market. The distributionof drugs was undertaken by the MOA, hence AISCO did not sell the drugs with 40% mark-up and the revolving fund was never established contrary to what had been envisaged atappraisal.

11. Veterinary Field Services. The main thrust of the Veterinary Field Services was toimprove the delivery of services to the primary animal producer by providing drugs, basicequipment, vaccinations, trained advisers and diagnostic support at the local level. To thisend GOE staff were trained and equipped with means of transport before they wereredeployed into about 150 woredas that were accessible to road transport. The impact of the

3

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Appendix A: Aide-memoire

veterinary field service was constrained by lack of drugs and their service limited toproviding some vaccination services.

12. Veterinary Epidemiology and Economics Unit (VEEU). The importance of theVEEU and its potential cannot be over-emphasised. At establishment technical assistanceexpeditiously installed computer hardware and developed appropriate software. At the sametime an intensive post-graduate training programme ensured that trained Ethiopian staff wereavailable to take over.An initial herd health and productivity monitoring programmne preparedby the VEEU, established baseline cattle productivity data from 9 regions in the project area.Complementary data collection, collation and dissemination programs were established forveterinary field services, diagnostic laboratories and meat hygiene services. The VEEU hasrecently been relocated to the new AHRC building. The close relation with diagnosticcapabilities at AHRC will certainly be of value to VEEU when more detailed diseaseinvestigation are instituted. With VEEU, Ethiopia is uniquely equipped to plan nationalanimal health services.

13. Central Disease Investigation Laboratory. This laboratory, now designated as theAnimal Health Research Centre (AHRC), was to be established as a national diseasediagnostic centre to replace and enhance those activities which had been accommodated at(NVI). Its construction was the only major building programme envisaged at appraisal, andpreparatory work proceeded reasonably well as the construction contract was awarded inAugust 1989. In spite of an early start of construction works, the laboratory and associatedbuildings are still incomplete and not fully commissioned. The reason for the delays in theearlier years are in part attributable to the lack of construction material. In addition, thequality of the construction is poor and with serious deficiencies for a laboratory. This ismainly due to the inadequate design and poor performance of the constructor and thesupervisors. The AHRC is now installing the laboratory equipment, and in many cases wallshad to be torn down to enlarge narrow doors that hinder the access of large equipment. It isunfortunate that the TA input has not coincided with the full commissioning of thelaboratory. However, the TA made a valuable contribution in installing some of the scientificequipment, training and preparation of manuals. Procurement delays in obtaining thenecessary range of re-agents, chemicals, stains and other consumables limits diagnosticcapability at present. The AHRC will not be fully functional without further investment.

14. National Veterinary Institute. Project support to the NVI primarily directed to therehabilitation and improvement of its existing vaccine production capability. Although therehave been some shortcomings with the delivery of the appropriate equipment and somedamage to equipment in transit, the NVI now possesses considerably enhanced vaccineproduction capability. This is claimed to have doubled its potential output, increased therange of vaccines, and enhanced its export potential. The anticipated addition of an FMD andrabies vaccine pro